Why I think we’re going to get a public option

There are 60 votes for cloture on any bill that comes out of conference. And Reid and Pelosi pick the conferees. Looks to me like game, set, and match.

I’m in Washington, giving a talk at AEI tomorrow. Â Tonight I had dinner with a group of folks I mostly didn’t know, Â including a couple of Republicans who had serious political-level health-policy jobs under GWB.

I said, “Isn’t all this too-and-fro on the Hill about health care just kabuki? Â The Senate passes something, the House passes something, it goes to conference, Reid, Pelosi, and Obama decide what goes in the conference report. Â All of them like a public option, so the public option is in. Â All the Senate Democrats, plus Snowe, will vote for cloture, eve n if they then turn around and vote against the bill. Â So we have 60 votes for cloture and more than enough for final passage. Â Is that wrong?” Â They both said, “Seems right to me.”

Of course I could be wrong about this, but I think Team Obama pretty much knows what it’s doing.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out.
Books:
Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken)
When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The EconomistAgainst Excess: Drug Policy for Results (Basic, 1993)
Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989)
UCLA HomepageCurriculum Vitae
Contact: Markarkleiman-at-gmail.com
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6 thoughts on “Why I think we’re going to get a public option”

But as with everything, the devil is in the details. The more we get right now, the less we have to fix later. Medicare Part E or Medicare + 5 or whatever is a start, but we'll need some sort of reinsurance system built into the system to balance risk. Otherwise, we've got a serious adverse selection problem in the public plan.

Basically, if we have a public plan (or even socially responsible and effective co-ops) that has to take all comers, then Denial-Care needs only to treat its sick patients as badly as they do now to shift them to the public plan. This runs up the rates of the public plan (or co-op), and allows Denial-Care to keep its rates low.

This isn't an insoluble problem: community rating and a mandatory reinsurance system will get the job mostly done, but the CBO says the current House bill's provisions are insufficient to solve the adverse selection problem.

There's also the problem of making the "E" in Part E really mean everyone, but that's going to take a while.

I suppose this is what we get when we insist on applying patches to a worn-out system instead of starting with a clean sheet and setting up a real single-payer health care system.

Question for Dennis or other persons with informed opinions: Uwe Reinhardt raised one concern about the public option that seems to demand an answer. He said that the goal of "competition" among health plans could lead to multiple plans in the market, with decreased leverage over hospitals because of decreased market share of each competitor. He identified the hospitals as the heavies in the equation, and suggested Maryland as a model, where hospital rates are centrally set so that the same service costs the same amount for each insurer. Does he have a point?

Ed – The goal isn't competition per se, as we already have many insurers with many different plan, all competing for your healthcare dollars, so long as you don't have a pre-existing condition, you don't max out your policy coverage, you don't end up getting some catastrophic illness like Cancer or such, etc. The goal is to provide affordable coverage to as many people who request it (but can't currently afford it). A secondary goal of a public option is to keep private insurers honest. That is to say, to stop their douchebag behavior of rescissions, interfering with Doctor-Patient relationship, and refusing to cover second opinions. That insurers face a short-term future of diminished market share indicates to me a positive, not a negative, since migration to other plans, including the public option would indicate what we already know: most people hate their insurance provider.

Insurers currently have hospitals over a barrel because they determine what the capitation rates are, and because hospitals are sapped by the costs of emergency care (which is what most uninsured people currently use as their health care), they almost always reluctantly agree to the rates that insurers offer, which often times is not the same as the true cost of service. I can see how, after health care reform, and with a public option in place, Hospitals could be the heavies in the post-health care reform era. I can't imagine however, that the public sector would be in the business of setting rates. If one hospital charges more for a certain procedure than another, that's just arbitrage at work, you really can't prevent it; nor should you.